In difficult times, being liquid is certainly a great advantage. When the Great Depression plummeted America’s economy to the worst form ever, there was widespread chaos. Workers were laid off. Banks closed triggered by the New York stock market crash in 1929. As the economic recession reached its peak in 1939, half the banks of America were closed for a good while 15 million Americans were jobless.
In a way, the pandemic has brought the ghost of the Great Depression back into the current times. Dubbed as the Great Lockdown, the COVID-19 scenario we have now has certainly brought the American economy to its knees. And while the Great Depression was like a screw that turned the economy upside down each year, the pandemic is like a nail that hit the economy with a massive force it had to adapt quickly.
In times like these, it’s easy to get lost and be driven by fear. As suffering pervades society, you might have a hard time holding on to your cash. And that can be a point against you.
Fortunately, if you have extra cash these days, there are investments that would prove to be most opportune for you. Pundits detail that while you may see a lot of missteps, putting your money in the right direction could pay huge dividends for you in the toughest of times.
Gold and Silver
Top of the list is gold and silver. That may make your jaw drop. But investing in these precious metals can be akin to buying insurance for any dark time. By the way, we’re talking about real physical gold, not just ETFs. And a good rule of thumb for you, if you have extra money, is to invest at least 10% of your net worth in buying gold or silver. It’s even a sound idea to store some in your personal abode.
Why? It’s simple actually. If markets crash as in the Great Depression or the pandemic, gold’s value skyrockets. If not, its value stays constant, not diving with the economy. In that sense, gold becomes a great lifesaver for you in hard times.
During the Great Depression, the value of gold rose from a mere $20.67 per ounce in 1929 to $35 an ounce by the time 1934 came. By any measure, that’s a lot of investment return you got there.
The virus has upended our way of life. Where before people cherished being in the biggest cities of America, today people would rather live in a country where there’s fresh air and the threat of the virus is not as pronounced. What that means is a glorious opportunity for you.
There is greater demand for single-family homes right now as city residents grew wary of apartment living or living in a condo where you meet a lot of people in the elevator. Being away from the crowd has become a de facto motto for millions of Americans bombarded by a daily count of infections.
In tough times, more and more people choose to rent, forced by the circumstances and sudden changes in the economy. Thus, if you have extra money, investing it in rentals could be a most profitable endeavor. Some key takeaways here are:
- Rents are bound to increase for single-family homes
- Mortgage interest rates are at an all-time low (3.88% over a 30-year period)
- Less competition as people hold on to their cash and fear investing
That is why a real estate developer is raking in handsome profits during these times. Not only are they given tax breaks, but also the demand for real estate properties is at an all-time high. Here’s a quick look at some ways you can get a tax break when you join the fray.
There’s writing on the wall. A study by Hancock Natural Resource Group detailed that widespread economic consequences will follow after the virus. And that means the demand for food will rise even faster than we expect. Already, online services are making tons of profit from the delivery of food during the pandemic.
Investing in farmland means you are positioning yourself right where the market is. Over time as the demand for food heightens even more, your investment today could mean double or triple profits in the near future.
If you have extra money, turning it into cash is a good idea in these times. Having 10% of your net worth tucked safely at home can be a timely decision. That may not be sound so enticing to you but think about it.
But there’s a lesson behind it. In the Great Recession of 2008, banks were on the brink of freezing all accounts as the finance world was in chaos. What that means is you would not have access to your savings. Imagine if that were to happen today.
Pay Off Your Property
If you can afford it, why not pay off your precious abode. That means you won’t be paying the 3% interest for years to come. Of course, do this only if after doing so, you still have money to spare.
Indeed, putting your money right is the name of the game. When you do, you’d be able to sail through the pandemic in flying colors.